Whether you started building websites for family and friends or built them as a hobby, you’ve probably stopped at one point and thought, “I could make some serious money out of this.”
If you dream about quitting your job and becoming your own boss but haven't had the chance to go through with it, then I'm here to tell you that that dream is achievable!
I made it, and after spending over 17 years (almost two decades!) as an employee, I can safely say it was the best decision I ever made.
But how do you go about taking that first step? How do you leap from side-hustle to full-time business owner? It depends on quite a few things, but really the big question is: what is your risk tolerance?
If you're a single pringle that lives in their parents’ basement and pays a few bills here and there, then this jump is going to be a whole lot easier than for someone who's married, has three kids, and is currently paying off their mortgage.
But even with a lot of responsibility, it's still possible.
Before I took the bull by the horns and went for it, I was married, had two kids, a home to pay off, student loans, car loans, credit cards, and my steady income was what kept us ticking along.
When I was thinking about making the move into business owner territory, I had to land safely on the other side, so I had to do it with the least amount of risk possible.
I started building websites for a few friends, and it wasn't long after this little venture that I realized this was what I wanted to do. I wanted to turn this passion into a “real” business.
So, on January 1st, 2017, I officially registered my company and set the goal to become a full-time digital agency owner within 1 year. Six months later, I gave in my 2-week notice, said goodbye to my old job, and never looked back. It wasn't easy, and there were a lot of hills to climb and minor hiccups to get over, but everything regarding the giant “leap” went as smoothly as possible.
I know, I know, you want to know exactly how I did it. How did I manage to safely make this leap with a family, a mortgage, and a load of loans?
It's all down to one thing: PLANNING.
By having a thorough plan in place, I was able to hit my milestones, stay motivated, and have the confidence to take that leap with two feet forward and never look back.
Your situation might be a bit different from mine. You might have more to lose or less to lose, but what we all need is a plan and self-motivation to make it happen.
Today, I'll cover the exact steps I took to make the leap from side hustle to business owner with the highest level of confidence possible.
Step 1: Figure out the bare minimum you need to earn each month to survive
A lot of the work needed to turn your side hustle into a full-time gig is going to be focused on replacing the income from your current primary job.
To do this, you're going to have to start going through all your bills and expenses to find out how much you need to survive each month. Figure out what amount of money (down to the dime) is enough for you to live on. This number is different for everybody, but I'd try to get it as accurate as possible.
If you need to estimate anything, always estimate on the high side just to be safe.
Once you have your number, you'll have your “Minimum Monthly Take Home Amount.”
Want to accelerate the process of being able to go full time?
- Get out of bad debt
- Lose those credit cards
- Pay off your car loans
- Reduce unnecessary expenditure (do you really need that Netflix subscription? And when was the last time you used the gym?!)
Killing off these bills will drastically reduce your monthly expenses, making it easier for you to go full-time business owner!
My first order of business when I decided to take that leap was to become utterly debt-free before I started my company. This drastically reduced the amount I needed to bring in each month for our family to survive.
And yes, it sucked.
We didn't go anywhere. We didn't eat at restaurants. We never went to the movies, and we pretty much-ignored anything “fun,” at least anything fun that costs money.
But, to be fair, it was the best thing we ever did. 10/10. I highly recommend it because it'll get you into that agency owner chair a lot faster.
Step 2: Build your runway
Unless you want to become a complete mess of a human being who's stressed 24 hours, 7 days a week, you're going to want to put a runway in place in case the first couple of months of self-employment don't go quite as you planned.
What is a runway?
It's your safety net: something to fall back on if you don't manage to make as much money as you thought you would. A good rule of thumb is putting away 6 months of your minimum monthly take-home amount.
So, take your minimum monthly take-home amount, multiply it by 6 and save this amount away just in case you run into trouble.
We'll call this your “Runway Savings Amount“. Here's how to make sure you get it put together.
- Go ahead and set up a separate savings account at your bank for your runaway savings account.
- Put any money you make from your side gig directly into the runway savings account.
- Keep pumping cash into it until the balance matches your Runway Savings Amount.
How long will that take?
It depends on how much you can make with your side hustle and how high your Runway Savings Amount or monthly expenditure is.
This is why it's so important to lower your expenses as much as possible. The smaller your expenses, the quicker you can complete your savings.
Why should you build a runway savings account?
Having this account will give you the peace of mind you need when taking the plunge into running your business full-time! You'll have the peace of mind that if EVERYTHING goes wrong and you don't make a penny, you can still survive for 6 months.
Chances are that won't happen!
But if it does, you'll have the money there, just in case.
You don't want to quit your job and start running your own business only to suddenly get sick or get hit by a bus and have nothing to fall back on. Plus, it might not even have anything to do with you. Sometimes the economy can just tank, and with nothing to fall back on, you could be left stranded and in deep shit.
The runway makes your leap a lot less risky and gives you more confidence to take that first step.
Step 3: Build & track your income
You should be tracking your income from your side gig each month – starting yesterday.
It doesn't have to be anything fancy, and you don't need to invest in expensive tools. Google Sheets will do fine.
Keep track of every single one of your projects. Every month, you should note any one-off projects you do and how much income you get from them. You should also include any recurring work you do.
Because to help build your confidence in your own abilities to run a business of your own, you have to be able to see that you're building up a track record and you're able to bring in your Minimum Monthly Take Home Amount each month.
Being self-employed is a lot different than having your regular 9 to 5 job. Your income can change pretty drastically from month to month, and you'll never know for sure when it's going to decrease or increase.
So keep track of all the projects you get in. It's going to take you several months to save for your Runway Savings Amount anyway, so during that time, keep a record each month of how much you're getting in.
Remember to include recurring revenue
It's essential to total up the one-off projects and track any recurring revenue you get in. Things like:
- Care plans
- Website maintenance
- Content packages
- Monthly updates
- Ongoing website support
Recurring revenue is a lot more predictable than one-off projects, and it'll give you more stability in the future. Plus, having a lot of recurring work will guarantee you some income, and this can help boost your confidence a lot when it comes to taking that leap.
Get to the point where 50% of your Minimum Monthly Take Home Amount is covered by recurring revenue. By bringing in half from recurring revenue sources, you'll only need to sell enough work to cover half your minimum instead of the total amount. This will undoubtedly help bring your stress levels down.
Sales can be inconsistent
Doing this as a side gig makes it even harder to be consistent.
Since your time is limited when you're busy working on a project, you might not have time to be out there selling too.
This can lead to what we call the “sales roller coaster,” where you have ups and downs in your sales.
For example, you get a big sale, and you're riding high, but then you get busy doing work, and your sales dip because you don't have time to focus on them. When the big project is over, and you've gotten paid, you've run out of work and have to switch to sales mode.
Having recurring revenue helps even things out by raising the “floor” of what your sales will be each month.
With no recurring revenue, your sales floor is $0. If you can sell 5 recurring care packages at $100 each, then your floor suddenly becomes $500.
Remember, never, ever stop trying to build the recurring revenue number!
Step 4: Set your goals and take the leap
You're at the beginning of the leap process, which makes now the perfect time to set up your goals.
Create goals based on what you need to be in place to take that leap.
Based on the advice I've shared with you so far, here are some goals for you to start with:
- Become debt-free (it'll make everything so much easier)
- Create a Runway Savings Amount and safely put it away in a dedicated runway savings account
- Make sure you're consistently bringing in a Minimum Monthly Take Home Amount each month
- Build up your recurring revenue to 50% of your Minimum Monthly Take Home Amount
Once you've got your set goals to achieve, I'd suggest printing out a checklist and hang it somewhere you'll have to look at every day. This will be your driving force when you're tired, and you don't want to work late that night, or you have to say no to a trip because all of your money is going into savings.
Plus, once you've ticked all those boxes, you can put in your two-week notice and go for it!
Worst case scenario, you have to go get a job again, but remember, you'll be able to grow your business MUCH quicker once you quit your job and put your full attention towards it.
If you hit all these goals while working a full-time job, imagine what you can do when you can put 100% of your focus towards it?
You could possibly double or even triple your income in a month or two, just because you'll have so much more time to put towards your business.
6 Tips To Help You Take The Leap From Side-Hustle To Full-Time Agency Owner
To help make the leap a whole lot easier for you, I've put together these six tips that will give you a little nudge in the right direction when it comes to starting your own business and becoming a full-time agency owner.
1. Don’t do this alone
If you're married, living with someone, or have anyone that depends on you financially, then you have to make them an integral part of the entire process.
They have to be as invested as you are in this project because if they're not on the same page as you, all of this could end up becoming really difficult.
Plus, if they understand and support your dreams, goals, and what you're doing, they're going to help you achieve them no matter what.
2. Get an accountant
Yes, having an accountant costs money, sometimes a lot of money, but it's money well spent, and I highly recommend getting yourself an accountant you can rely on.
You can make a million mistakes with your finances and there are only a few ways to do it right, but with an accountant, you can reduce the number of errors you make.
It's worth paying out for their expert advice, and it'll definitely end up saving you a lot of money in the long run. Besides, nobody likes doing finances. Numbers are a pain in the ass!
3. Write up a business plan
We know it's boring, it's dull, and it's going to suck, but developing a business plan and actually writing it up will give you a clear guiding light for your company's future.
Take a look online for a free one-page business plan template that you can quickly fill in. Having a business plan completed is better than having a perfect business plan, and if nothing else, it will at least help you think of some things you need to plan for that you might not have thought of otherwise.
Plus, you also get a cool memento to look back on years down the road when you're an uber-successful digital agency.
4. Try new things
We all hate trying new things. Sticking to what we know and staying in our comfort zone feels great, but we wouldn't figure out what worked best for us if we all did this.
You're going to see a million ideas for new things to try, especially in groups like The Admin Bar. Everybody has their own little things that make everything more manageable, and there are a bunch of YouTube videos, advice columns, and digital gurus out there ready to give you the words of wisdom you need.
Most mean well, but not everything is going to work for you, and that's okay.
It's a lot easier (and less risky) to experiment now at the beginning of your business venture than it will be when your business has to support you (you know, when you hand in your notice and start working for yourself).
Remember to always make a note of what works for you, and more importantly, what doesn't, so you can find the perfect processes for running your digital agency.
5. Always be honest
It might be tempting to be a bit…untruthful or less forthcoming with clients or potential clients about your employment status. A lot of people get it into their heads that people won't hire them if you're a ‘part-timer,' but this just isn't true.
However, lying about your employment status could start raising some red flags with your clients and might even cost you some customers.
Just be honest with them. There are loads of businesses out there that can't afford the big agencies for their company websites and marketing, so you're the perfect solution for them.
Don't hide it. Lean into it.
I have customers that have been with me since I started way back when I had a full-time job and lots of loans to pay off, and they're now some of my biggest champions and cheerleaders.
6. Document your processes
Even if you think it's a waste of time, always document your processes. The quickest way to create a good strategy is to document your current process and continue improving it over time.
Trust me, you'll end up spinning your wheels for way longer than necessary if you fly by the seat of your pants with every project.
A so-so process is better than no process at all, and the only way you can improve a process is to have one in the first place.
So don't rely solely on your instincts. Have a process, stick to it and improve it when you need to.
Are you feeling a bit more confident about taking that leap and becoming a full-time agency owner?
Good, I’m delighted to hear that.
Following the steps that I took might take you down the path you’re looking for and with a bit of adjustment, I’m sure you can make them your own.
Everybody’s journey is different but the destination is the same and by taking my advice on board I’m sure you can make it to the other side in one piece.
The most important things are to have confidence in yourself, make sure you have a backup plan, and surround yourself with people who are there to support you and help you reach your goals.
People everywhere have side-hustles going on and if they can make the switch to owning their own digital agency then you can too.
Want some help figuring out the first step to take? Head over to The Admin Bar Facebook group and chat to other agency owners about their experiences, tips, and insights into taking your side-gig to the next level.